Mantle Jumps On T-Bill Bandwagon With mUSD Stablecoin

Mantle, an Ethereum Layer 2 network, is the latest web3 team to embrace real-world assets in the form of U.S Treasury Bonds.

On Dec. 4, Mantle deployed its mUSD stablecoin, comprising a rebasing version of USDY from Ondo Finance. USDY is a yield-bearing stablecoin described as a “tokenized note secured by short-term U.S. Treasuries and bank demand deposits.”

USDY went live in August, offering yields derived from U.S. treasury bills and banks deposit interest to holders. USDY went live on Mantle in early November.

mUSD comprises a Mantle-native wrapped version of USDY that distributes yield by minting new token units. The stablecoin currently offers annual percentage yields of roughly 4%.

Mantle’s MNT token is up nearly 4% over the past 24 hours, according to CoinGecko.

On-chain U.S. Treasury Bills

mUSD’s launch comes as U.S. Treasury Bills have emerged as a popular vehicle for accessing exposure to yields derived from real-world assets (RWAs) on-chain.

MakerDAO was the flag-bearer for embracing real-world assets in web3, with its RWA portfolio growing from $17M to $2.8B since the start of 2022, including more than $2.35B worth of U.S. Treasury Bills. With RWAs driving more than 80% of MakerDAO’s revenue as of July, a plethora of web3 projects have since moved to embrace U.S. t-bills.

Last week, Web3 Foundation, the organization behind Polkadot, deployed a$1M pilot investment into U.S. Treasury Bills via Anemoy, a Centrifuge Chain-based asset issuer. The Web3 Foundation said it plans to increase its allocation in the future.

However, 10-year U.S. treasury bond yields are down15% since tagging a 15-year high of 5% in late October, according to TradingView. Arthur Hayes, the co-founder of BitMEX, attributed the trend to increasing U.S. military expenditures in support of both Ukraine and Israel’s military conflicts, noting that some institutional entities had already moved to reduce exposure to U.S. t-bills.

Mantle moves into liquid staking

mUSD comprises the second product launch announced by Mantle this week, with the project also deploying a permissionless and non-custodial Ethereum Liquid Staking Protocol (LSP) on Dec. 4.

Mantle LSP users will receive the new Mantle Staked Ether (mETH) liquid staking token, a yield-bearing ERC-20 token representing their staked Ether that automatically accrues rewards. MNTIS is up 13% over the past seven days following the new product launches.

Mantle hopes to capture market share away from Lido, the largest liquid staking protocol with a 32.25% dominance over the supply of staked Ether, according to Dune Analytics.

Many analysts have criticized Lido for failing to self-limit its dominance despite researchers warning that a single entity controlling more than one-third of staked Ether could threaten the decentralization of the Ethereum network.